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PRECIOUS-Gold hits near 1-month high as investors worry over U.S. election

Published 02/11/2016, 06:42 pm
Updated 02/11/2016, 06:50 pm
© Reuters.  PRECIOUS-Gold hits near 1-month high as investors worry over U.S. election
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* U.S. election uncertainty seen lifting gold

* Fed meeting outcome awaited, rate hike not expected until Dec

* Spot gold seen testing resistance at $1,293 - Technicals (Updates prices)

By Apeksha Nair

Nov 2 (Reuters) - Gold hit a near one-month high on Wednesday as investors grew more concerned over the global economic outlook and started looking for safe-haven assets on signs that the U.S. presidential election race was tightening.

The mounting anxiety over the elections after the renewal of the FBI probe into Democratic candidate Hillary Clinton's emails has left investors favouring gold and other safer assets over riskier ones like stocks. MKTS/GLOB

"Uncertainty leading up to the U.S. election is likely to provide support to the precious complex," MKS PAMP Group trader Jason Cerisola said.

Spot gold XAU= was up 0.4 percent at $1,292.81 an ounce at 0715 GMT. Bullion touched its highest since Oct. 4 at $1294.43 per ounce.

U.S. gold futures GCcv1 rose 0.47 percent to $1,294.00 per ounce. Earlier in the session, it touched a one-month high at $1,295.70.

Markets were also awaiting direction on a U.S. interest rate hike from a two-day U.S. Federal Reserve policy meeting. The outcome of the Federal Open Market Committee meeting was due later in the day, although a rise in rates before December was seen as unlikely.

"The FOMC this week isn't in play. What's driving all of this is that (Republican candidate) Donald Trump is closing in on Hillary Clinton at a very rapid rate post the developments in the email server saga," said Jeffrey Halley, senior market analyst at OANDA.

"For the next two weeks, it is all going to be about the U.S. elections and gold is a main beneficiary," he said.

The Fed is mostly expected to keep interest rates unchanged on Wednesday though setting the stage for a hike in December. is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, and also boost the dollar, making the metal more expensive for those holding other currencies.

Asian shares tumbled to seven-week lows on Wednesday and the dollar was on the defensive just days away from the U.S. presidential vote on Nov. 8 MKTS/GLOB

The dollar index .DXY , which measures the greenback against a basket of major currencies, was down 0.03 percent at 97.673.

Spot gold XAU= may end its bounce around a resistance at $1,293 per ounce, as suggested by its wave pattern and a Fibonacci ratio analysis, according to Reuters technical analyst Wang Tao. other precious metals, silver XAG= climbed as much as 0.4 percent to $18.39 per ounce. Earler in the session, the metal hit a high of $18.50, its highest since Oct. 4.

Platinum XPT= slipped as much as 0.5 percent to $985.50 per ounce and palladium XPD= dropped as much as 0.36 percent to $629.40.

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